Question

Bon Air, Inc., purchased 70 percent (2,800 shares) of the outstanding voting stock of Creedmoor Corporation on January 1, 2007, for $250,000 cash. Creedmoor’s net assets on that date totaled $230,000, but this balance included three accounts having fair values that differed from their book values:

As of December 31, 2010, the two companies report the following balances:

Prepare a worksheet to consolidate these two companies as of December 31, 2010. Because Bon Air acquired Creedmoor before the effective date of the acquisition method (2009), the purchase method isappropriate.